G7 outlook worsens, OECD says

The outlook for all the world's major economies worsened in January, and all
four BRIC countries – Brazil, Russia, India and China – are now experiencing
a "strong slowdown", the Organisation for Economic Co-operation
and Development said on Friday.

By Angela Monaghan

7:58PM GMT 06 Mar 2009

The OECD's gauge of "leading indicators", which gives warning of trend changes a few months in advance, showed that the G7 fell to 91.7 in January from 92.8 in December, where any decreasing number below 100 represents a slowdown in economic activity. In a gloomy report the OECD said there was "little clear indication of stabilization soon."

The UK dropped by 0.3 points on the indicator to 95.7 in January, 6.7 points lower than a year ago. The pace of decline was actually slower than four of its fellow G7 countries, including the US which dropped by 1.4 points to 90.1.

However, the economies slowing at the fastest rate were Russia, Brazil and China. The index for Russia fell by 3.3, Brazil was down 2.7 and China fell 2.1.

The data will add to concerns over the future of the Chinese economy, because it had been hoped that growth there would help to alleviate problems in the rest of the world. On an annual basis, China fell by 14.8 points on the OECD measure, second only to Russia which fell by 19.4.

China's exports began to fall in November, as the global recession hit its textile, toy and steel industries. Reports in China suggest that figures will show the country's exports and imports fell by more than 20pc in February. That would slash a trade surplus of $39bn (£27.6bn) in January to about $7bn (£5bn), according to Mark Williams at Capital Economics.